83 Drafting an option to purchase

Copyright © 2025 LexisNexis

BUSINESSES vol 4(2) start-up, sale and purchase

83 Drafting an option to purchase

Copyright © 2025 LexisNexis

| Commentary

One of the most difficult issues to arise on the retirement of a partner is what is to happen to that partner’s share in the partnership. Consequently, most partnership agreements contain provisions conferring on the remaining partners the right to purchase the outgoing partner’s share¹.

The agreement should lay down the procedure for exercising this option. Commonly, the

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(1) START-UP

84 Restrictive covenants

85 Bankruptcy and death

86 Expulsion

87 Effect of dissolution

88 Allocation of profits on dissolution

89 Similarities between a limited liability partnership membership agreement and a general partnership agreement

90 Registering the limited liability partnership

91 Commencement and duration

92 Designated members

93 Accounting provisions

94 Members’ contributions and rights

95 Winding up

96 Notices

97 The statutory contract under the Companies Act 2006

98 Changing the statutory contract

99.1 The parties’ expectations

99.2 Decision making

100.1 Invalid amendments

100.2 Other limitations on amending the articles

101.1 Russell v Northern Bank